In 2019, Spring Activator launched its very first Impact Investor Challenge. Since then, we have successfully run four Challenges, leading to $350,000+ made in direct investments to the winners, thus far spanning four women-led and co-led ventures across cleantech, healthtech, and independent media. The program has also catalyzed approximately $4.8 million in impact investments made to participating ventures across the board.
Participants have shared with us that they have appreciated the unique nature of the Challenge where entrepreneurs and investors learn side by side, from and with one another. The program has also provided a space where investing can be explored from different perspectives than those through which it has traditionally been seen.
Graham Day, Impact Investing Program Director at Spring Activator, elaborates exactly on how we’re changing the conventional investing narrative and transforming the ecosystem to build a space that is more diverse, inclusive, and equitable—where every investor is an impact investor. Read on to explore his take and learn why this shift is necessary.
The Exclusivity Narrative that Often Accompanies Investing Needs to Change
If you’ve ever watched CBC’s Dragon’s Den (or Shark Tank, the U.S. equivalent), you’ve likely come away feeling a little woozy from the three-part tonic of excitement, intrigue, and disgust. Entrepreneur after entrepreneur goes before the almighty dragon jury to state their case and hear their verdict. In some cases, the entrepreneur goes away with a deal (though not always a good one). In others they are dismissed, usually after a volley of bruising questions.
In this theatrical display of victory and tragedy, financial returns are prioritized above all else while power lies firmly in the hands of the judges. Hierarchy reigns supreme and entrepreneurs are often sent home with discouraging words, potentially dashing dreams to the dust.
To be sure, Dragon’s Den was designed as a form of entertainment and it is not a broad representation of reality. However, through entering the living rooms and minds of many a spectator, it does something unfortunate: it perpetuates the exclusivity of angel investing and successful startups. In the world of dragons and sharks, investors must be wealthy, omniscient and surly, while entrepreneurs must be clever, manicured and confident.
With this narrative, how can we hope to make becoming an investor more attainable and broaden the appeal of early-stage investment? How can we empower value-driven individuals to vote with their dollars and give back to purpose-driven entrepreneurs? How can we turn investing into an inclusive and safe space? And how do we increase the availability of early-stage capital for more entrepreneurs with incredible impact-first ideas?
Introducing the Impact Investor Challenge: A Collaborative Learning Experience
At Spring Activator, we set off two years ago to create a program that challenges this narrative. The Impact Investor Challenge brings together new investors to the impact space for a collaborative learning experience alongside entrepreneurs.
Over 11 weekly sessions, investors learn—from the Spring team, guest speakers, and each other—about the basics of angel investing through a lens that considers social and environmental impact. We create a safe space for established investors, those just starting out, and everyone in between and in various phases of their impact journeys that facilitates knowledge-sharing, empowerment, and capacity-building.
From an initial group of 20 entrepreneurs vetted and selected by Spring, the investor cohort chooses five to accompany them through the core program sessions. In the end, a single winner is chosen by popular vote and the entire investor cohort makes a pooled investment in this company. For some, this is their very first impact investing experience.
As for the entrepreneurs, it is not only the winner that benefits. All participants gain value from the sessions with the investors. Startups learn how to quantify their impact, receive feedback from experts in their industries and business development, and gain beneficial exposure to investors. They also gain a community that will support them along their entrepreneurial journeys going forward.
Impact as the New Narrative Towards a Strong, Regenerative Investing Ecosystem
In the Impact Investor Challenge, unlike Dragon’s Den, we focus the investment criteria also on the impact businesses create, not just the financial return. We use a code of conduct to ensure that both entrepreneurs and investors are treated with respect, and we structure voting so that entrepreneurs are appealing to the majority of the group rather than appeasing only certain investors. We also bring the whole village: our pitch events are open to our alumni and the public, so that more individuals can join the final investment.
Every now and then, somebody refers to the Impact Investor Challenge as “The Dragon’s Den of Impact.” Far from that, we are a strong but humble program inspiring and educating investors to solve problems by supporting impact-oriented entrepreneurs. In doing so, we are also building a robust impact ecosystem where everyone can thrive and funded solutions cater to the needs of people and the planet.
In the words of myMomentum Founder & CEO Anna Chan on why she decided to join the Impact Investor Challenge as an investor:
I realized there is a massive wall that exists (despite us not wanting it to) between entrepreneurs and investors and could not help but attempt to knock those walls down because to me impact investing is about the impact we are creating together as an ecosystem and community that benefits us all.
And how about you?
Will you be joining us and our partners—DLA Piper, INK LLP, MNP, Genus Capital Management, Tandem Innovation Group, Active Impact Investments, and Karl Jung Financial Services—in shifting the narrative and building a new, impact-first investing ecosystem?
Find out more about our Impact Investor Challenge and join our next intake as an investor, entrepreneur, or partner.